Introduction
On August 5, the SEC’s Division of Corporation Finance released new guidance on liquid staking, expanding on its May 29 statement on solo, self-custodial, and custodial staking. The SEC Staff’s view is that liquid staking activities, as described in the guidance, and the issuance of receipt tokens, do not involve the offer or sale of securities and participants are not required to register under the Securities Act of 1933 (Securities Act).
For institutions, this is another step toward regulatory clarity. It confirms that, when the liquid staking provider’s role is limited to administrative functions and the underlying asset is not a security, liquid staking should be treated the same as other protocol staking models.
What is Liquid Staking Generally
Liquid staking allows token holders to stake assets while keeping them liquid through staking receipt tokens. These tokens:
- Represent ownership of the underlying assets and any rewards
- Are typically issued 1:1 with deposited assets
- Can be used in other applications, such as collateral or DeFi, without unstaking underlying assets
- Can be redeemed for the underlying assets, subject to any unbonding period.
What Came Out on August 5th, and What It Means
SEC Staff clarified that liquid staking activities are not subject to regulation under the Securities Act when:
- The provider’s role is purely administrative, such as facilitating staking, holding assets, and issuing or burning tokens
- The provider does not make discretionary decisions about whether, when, or how much to stake
- The provider does not guarantee returns
- The deposited assets are not securities or subject to an investment contract
Furthermore, staking receipt tokens do not constitute the offer and sale of securities and do not require registration under the Securities Act where the staking receipt token is merely a receipt for the staked asset. As such, rewards gained through staking the underlying assets or any slashing losses incurred on such assets must be reflected in the amount of both the underlying asset and the staking receipt token.
For institutions, this guidance provides a clearer path for integrating liquid staking into investment strategies, platforms, and products. Properly structured staking receipt tokens can be treated as operational receipts rather than securities, reducing uncertainty for product design and launch timelines.
What It Does Not Mean
The August 5 statement does not apply to:
- Restaking, where staked assets are used to secure additional networks or applications
- Arrangements where the liquid staking provider makes discretionary staking decisions or guarantees returns
- Staking receipt tokens that generate profits from the provider’s own efforts
- Assets that are securities or part of an investment contract
Conclusion
The SEC Division of Corporation Finance’s latest statement is a milestone for liquid staking in the United States. It confirms that, when structured within the described parameters, liquid staking will be treated like other protocol staking models. This opens the door for greater institutional adoption.
While the statement reflects the SEC Staff’s view and is not binding on Commission action, the direction is clear. With the right structure, liquid staking can be offered without triggering registration requirements under the Securities Act.
At Figment, we continue to work with institutions, policymakers, and regulators to ensure staking products are built for performance and compliance. If you are exploring liquid staking as part of your product roadmap, we are ready to help you build it.
